Live the high life on Holland Hill

(Abstract from TodayOnline 14th Nov, 2009 by Tan Hui Leng)

MCL Land and Ho Bee will launch the 12-storey freehold Parvis condo over the weekend. Located at Holland Hill, Parvis is a 248-unit development located near the Farrer and Holland MRT stations along the Circle Line. There are two-, three- and four-bedroom apartments, as well as penthouses with sizes ranging from 990 to 3,229 square feet. The average price is $1,480 per sq ft.

Copyright 2009 MediaCorp Pte Ltd | All Rights Reserved

Parvis at Holland Hill

Smooth out all cycles... and not just the commercial ones

(Abstract from TodayOnline 14th Nov, 2009 by Colin Tan)

Asset inflation and property cycles hogged the news again this week. On Tuesday, Finance Minister Tharman Shanmugaratnam spoke about the need to manage the property cycle while the Finance, Trade and Industry GPC stated that businesses want predictability to minimise volatility and to remain cost-competitive. It felt there is room for the Government, particularly in the industrial and commercial arenas, to manage externalities and reduce waste.

Today, the problem of economic waste cannot be over- emphasised. Recent third-quarter data show that the office vacancy rate has risen to 12.2 per cent. As at the end of September, there are an estimated 9 million sq feet of empty office space. This translates to about four years' worth of annual supply.

At the same time, those tenants who have signed new leases 18 months ago or earlier are packed like sardines to cope with the then-high rents. Imagine how much more efficient these firms could have been with more space?

But managing cycles in the residential arena is just as important, if not more so, as it concerns every Singaporean from the very top to the bottom.

Should we have "managed" the sharp rise in prices in the upper-end of the private housing market in 2007 ? Or as one columnist in a business paper suggested: Having high luxury-home prices is good. Besides bringing big-spending wealthy investors, it helps generate real-estate-related jobs.

On hindsight, we should have. This is because the economic rent earned by developers in the upper segment lead to the re-assignment of resources from the mid- and mass-segment to the upper-end. It was thus no surprise that supply at the lower end in 2007 was thin. This eventually led to rising prices this year.

But another negative impact of price volatility is that it encourages anyone wishing to enter the market to "time" their purchases. This is because if you got your timing right, you could potentially "save" or "earn" a lot. So, we have a situation where buying is based not on need but on sentiment. Households who should be buying are not, while those who should not are doing so.

Some will delay their purchase in the hope that prices will correct later. Others will buy ahead of their needs because they are afraid prices may rise beyond their reach.

Yet others will speculate. The higher the volatility, the greater the opportunities for speculation. Housing demand then becomes very distorted and difficult to understand or predict. It is no wonder then the relevant policy-makers took such a long time to decide what to do.

And when potential buyers get their timing wrong, as many probably did, they were "forced" into the cheaper HDB resale market. By adopting a market-based approach to pricing new flats, the HDB was also caught out by the market distortion in the private market which had spilled over into the public segment.

For months, it insisted that applicants were very fussy even though demand for new flats remained low even after it introduced new rules to weed out frivolous applicants. Marketers will tell you that if you reduce the price of an unpopular unit enough, there will be takers. That's what private developers do with their remaining units.

Property is also about location. Even though prices are the cheapest in the outlying areas, it does not mean that the less well-off will automatically buy them. Although priced higher, resale flats may offer better value overall in terms of amenities, social networks, travelling time and fewer ERP gantries. ¢

The writer is the head of research and consultancy at Chesterton Suntec International. The opinions expressed here are his own.

Copyright 2009 MediaCorp Pte Ltd | All Rights Reserved

UOL Q3 profit up 44 per cent

(Abstract from Business Times 14th Nov, 2009 by Kalpana Rashiwala)

Increase due to gains from Nassim Park Residences, associate UIC

UOL Group's third-quarter net profit has risen 44 per cent year on year to $105.6 million. Revenue increased 21 per cent to $323.9 million, thanks to progressive recognition of revenue from development properties.

UOL's bottom line received a fillip from a tripling in share of profits of associated companies to $48.2 million from $15.1 million for Q3 2008.

This was on the back of higher contributions from the progressive completion of Nassim Park Residences (in which UOL has a half share) and UOL's 31.9 per cent share of the profit of United Industrial Corporation, which became an associated company this year.

Revenue from property development rose 49 per cent to $203.5 million, accounting for nearly two-thirds of total group revenue. Among the projects that contributed to UOL's Q3 report card were two new launches this year - Double Bay Residences and Meadows@Peirce, which have sold a total of 937 units to date.

Rental income from investment properties rose 9 per cent on the back of higher occupancy and rental reversions for most of the group's investment properties. However, revenue from hotel operations fell 13 per cent amid the decline in tourism markets.

UOL group chief executive Gwee Lian Kheng said: 'Our development profit showed a significant increase, attributed to our timely launches and locking in and controlling of construction costs.'

In the first nine months of 2009, UOL's net profit rose 60 per cent to $417.2 million. Revenue increased 15 per cent to $734.3 million. Shareholder funds rose 19 per cent to $4.04 billion as at Sept 30, 2009 - on the back of fair-value gains on available-for-sale financial assets, the group's operating profits for the first nine months of this year, and recognition of negative goodwill and capital reserves arising from the acquisition of additional interest in UIC. Consequently, net tangible asset backing per share rose to $5.11, from $4.22 at end-2008. UOL's gearing ratio improved to 0.39 from 0.42 over the same period.

UOL's hotel arm, Pan Pacific Hotels Group (formerly known as Hotel Plaza), posted a 25 per cent year-on-year drop in Q3 net earnings to $10.1 million on a 6 per cent dip in revenue to $72.8 million.

Nine-month net profit slid 39 per cent to almost $27 million. Revenue fell 12 per cent to $205.1 million. Pan Pacific said that it expects the business climate to remain challenging.

In the stock market yesterday, UOL closed unchanged at $3.29 yesterday while Pan Pacific Hotels ended one cent higher at $1.35.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

Occupancy at ready-built JTC facilities dip

(Abstract from Business Times 14th Nov,2009 by Uma Shankari)

Net allocation remains in negative territory in Q3 2009 at negative 10,300 sq m against Q2's negative 7,800 sq m

JTC Corp yesterday reported that the occupancy level at its ready-built facilities (RBF) fell slightly in Q3, by 0.3 percentage points to 97.1 per cent. In Q2, the occupancy level was stable at 97.4 per cent.

The industrial landlord also said in its quarterly facilities report that net allocation of its RBF remained in negative territory in Q3 2009 at negative 10,300 square metres, which was weaker than the negative 7,800 sq m recorded in the previous quarter.

On a year-on-year basis, the negative net allocation of RBF saw a steeper fall, from the negative 500 sq m recorded in Q3 2008. The decrease in net allocation came as termination rose by 3 per cent to 26,200 sq m from 25,600 sq m in Q2 2009. However, this is a slowdown from the 30 per cent rise in termination seen in Q2 over Q1.

The top three industry segments that contributed to the RBF termination in Q3 2009 were electronics (which accounted for 34 per cent of termination), chemicals (21 per cent) and precision engineering (21 per cent). A large proportion (some 33 per cent) of companies that terminated said that 'consolidation of operations' was their primary reason. But for JTC's prepared industrial land (PIL), the net allocation bounced back into positive territory, achieving 14.7 hectares in Q3 2009 from negative 32.8 ha in the previous quarter.

JTC said that the swing into positive territory was caused mainly by a manufacturing-related company that took up 12 ha of land during the quarter.

Gross allocation in Q3 climbed to 25.7 ha, compared to 5.4 ha in Q2 2009. Termination registered a 71 per cent fall from the previous quarter to 11 ha in the third quarter. However, on a year-on-year basis, net allocation declined by 66 per cent from 43.5 ha in Q3 2008.

During the quarter, a larger proportion (83 per cent) of the gross allocation of PIL went to manufacturing related and supporting sector. The main segment contributing to the PIL termination was the construction industry, which accounted for 65 per cent of termination.

JTC also said that Fusionopolis phase 2A is currently under construction and is expected to be completed by 2014. The project will have a gross floor area of 103,630 sq m.



Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

Wheelock reports 59.1% fall in Q3 earnings

(Abstract from Business Times 14th Nov, 2009 by Kalpana Rashiwala)

WHEELOCK Properties (Singapore) posted a 59.1 per cent year-on-year fall in third-quarter net earnings to $54.26 million. Revenue slipped 42 per cent to $133.1 million for the quarter ended Sept 30, 2009.

For the first nine months, net earnings decreased 43.6 per cent from 9M 2008 to almost $93 million. Revenue was 22.4 per cent lower at $296.5 million.

The group attributed lower revenue for Q3 and 9M 2009 chiefly to lower revenue recognition from Scotts Square based on the progress of construction works.

As well, the completion of The Sea View and The Cosmopolitan condos in Q2 and Q3 last year resulted in lower revenue in the latest period.

However, this was partly offset by higher revenue booked from Ardmore II based on the progress of construction works and revenue recognised from Orchard View, on which profit recognition began in Q3.

Wheelock had $337.4 million of investments in its balance sheet at Sept 30, 2009, an increase of $195 million from the figure at Dec 31, 2008.

The increase was due chiefly to a rise in market value of the group's investments in listed Hotel Properties Ltd (HPL) and SC Global Developments.

An impairment loss of $23 million was charged to the income statement in the first quarter ended March 31, 2009. And a subsequent increase in market value of $218 million from April 1 to Sept 30, 2009, was credited to the fair-value reserve under Financial Reporting Standard 39. As a result, shareholders' equity rose to $2.3 billion at end-September 2009, from $2.1 billion at end-2008.

The group's borrowings fell from $392 million at end-2008 to $232 million at end-September 2009 - largely due to repayment of an unsecured loan and part pre-payment of a secured loan from sales proceeds in the current financial period. The debt- to-equity ratio decreased from 19.1 per cent to 10.1 per cent over the same period.

Wheelock said return on shareholders' equity for 9M 2009 was 4.1 per cent, down from 7.5 per cent a year back.

Cash and cash equivalents fell from $756.7 million at end-2008 to $732.98 million at end-September 2009 - due to repayment of loans and dividend payouts. However, the group said it expects to strengthen its cash position with the completion of Ardmore II, which is fully sold, in the first half of 2010. 'We are in good stead to confidently pursue all good investments and development opportunities,' it said.

Wheelock's net asset value per share rose from $1.72 at end-2008 to $1.92 at end-September 2009. On the stock market yesterday, the counter closed a cent higher at $1.74.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved

ST : Pasir Panjang Village Centre to go‏

Nov 13, 2009

Pasir Panjang Village Centre to go

New owner will tear down building and build condo in its place

By Jessica Lim

CHANGE is coming to the Pasir Panjang Village area, home to a clutch of pubs, restaurants and shops.

The Village Centre, a four-storey building housing a Cold Storage supermarket and various shops ranging from a nail salon to a laundromat, will be pulled down and rebuilt as a condominium with shop spaces on the first floor and in its basement.

The tenants in the building have been given until April next year to move out.

A 30-space carpark and a bungalow sitting next to the building will also become part of the new five-storey development, which will be ready by 2013.

But the row of pubs and restaurants occupying the conserved shophouses next door will stay.

This change comes just as this sleepy hollow seems to be blossoming into a slightly busier suburban nook.

Mr C. K. Ching, chief executive of boutique property developer Hume Homes, which owns The Village Centre, said the tenants have to go in order for the place to be revitalised.

'There will be a better concept, more variety and will really add to the environment. Now, the place is very quiet,' he said.

Hume Homes bought the building from Ridge Investments for $23 million in June. A showroom launch for the condominium will be held in January, and the wrecking ball will start swinging in April.

The commercial space in the new development has already attracted interest from Starbucks, while Cold Storage has also expressed interest in moving back in.

The building - at the junction of South Buona Vista and Pasir Panjang roads - was a quiet spot only two years ago.

But tenants have since moved in, and brought with them customers in search of food and a tipple, groceries and other services, though the buzz is nowhere near that of Holland Village.

The change has ruffled a few feathers.

Nail salon owner Doreen Tan, 35, said she signed a two-year lease for her second-floor shop, Vois, only in May, and had sunk $20,000 into renovations.

'When we got the news, it was such a big blow to us,' she said of the termination letter, which came last month.

Some residents also dread the loss of the area's only commercial development.

Mrs Davi Beschizza, an artist in her 40s, and a mother of one, who lives in a condominium a 10-minute walk from The Village Centre, said: 'It's going to be very inconvenient. We don't have any other supermarket near here. For the next three years, I will have to take a bus or taxi to Bukit Timah Plaza or West Coast Mall, both of which are quite far away.'

ST : Record $653,000 for 4-room flat‏

Nov 13, 2009

Record $653,000 for 4-room flat

Industry players caution high price for unit in Queenstown is a one-off

By Jessica Cheam

A FOUR-ROOM Queenstown HDB flat has sold for $653,000, setting a new record for price per sq ft (psf), amid continuing red-hot demand for resale flats.

The buyers, a male Indonesian permanent resident and a Singaporean woman, could have bought a condominium unit in an outlying area for the price.

But they were won over by the location, just five minutes walk from Queenstown MRT station, and on the top, 40th floor of the block, with unblocked views of greenery from all windows.

The four-year-old 969sqft unit at Forfar Heights, Strathmore Avenue, sold for $68,000 above valuation - a level determined by an independent valuer.

This works out to $674 psf, smashing the previous record of $609 psf, achieved in January last year, by about 10 per cent.

This may be an unusually high price but resale prices have been moving up.

Recent Housing Board data shows resale flat prices surged 3.8 per cent in the first nine months of the year, reaching a historic level - surpassing even that of the 1997 property peak.

The deal was brokered by Mr Chris Neo, 32, and Kelvin Lim, 28, marketing directors of ERA Realty. Mr Neo told The Straits Times yesterday that the price was good for the prime location.

'Although at that price you could buy a private property somewhere else, at this location, you wouldn't be able to get private property for less than $900 psf,' said Mr Neo, who has three years' experience and specialises in HDB flats in Queenstown.

He clinched the deal by persuading the vendors, who had not been looking to sell, to part with their home - promising a good price. He then trawled property websites to look for potential buyers.

The buyers declined to be interviewed.

However, seller Michael Nandakumaran, 55, was thrilled. 'We were surprised that we could achieve this price, but are very glad about it,' he said.

The final selling price is about 2.5 times the $262,000 he and his wife paid a few years ago when their flat was selected for HDB's en bloc redevelopment scheme.

They paid a designer $60,000 to renovate their Queenstown home.

The couple, who have three children, are off to live in Jurong East in an HDB flat.

HDB's latest data shows four-room units in the Strathmore Avenue block sold for between $501,000 and $595,000 between February and June.

The latest record stunned some industry observers. Ngee Ann Polytechnic real estate lecturer Nicholas Mak said it was 'highly unusual' for buyers to pay that price when they could get a private condominium unit, albeit in an outlying estate.

Still, he feels that this could be the first of more to come as HDB resale flat prices creep up. 'The record will stand for a couple of quarters and if prices keep climbing, we'll see another record.'

ERA Asia-Pacific associate director Eugene Lim, however, thinks the sale is a one-off, owing to its good attributes.

'This is not common at all and is not the general trend. Usually, such sales happen only when there's a well-off buyer who wants a specific location and has the budget for it,' he said.

Mr Mak added: 'This sale is going to be quoted by sellers and agents to try and get people to pay higher prices. Buyers have to bear in mind such sales are not usual and not get pressured into paying more than they should.'



The four-year-old 969sqft unit at Forfar Heights, Strathmore Avenue, is just five minutes walk from Queenstown MRT station, and on the top, 40th floor of the block. The price paid by the Indonesian buyer is about 2.5 times the $262,000 the seller and his wife paid a few years ago. -- ST PHOTO: DESMOND LIM

BT : CDL sells $1b worth of homes in Q3‏

Business Times - 13 Nov 2009


CDL sells $1b worth of homes in Q3

It posts 28.4% jump in profit, sells North Bridge Commercial Complex

By KALPANA RASHIWALA

CITY Developments Ltd (CDL) sold 854 private homes for a total of about $1 billion in the third quarter of this year. As a result, its sales tally for the first nine months of 2009 came to 1,391 units worth about $1.72 billion, a big jump from the 360 units of about $340 million in the same period last year.

Residential projects that contributed to the group's latest Q3 sales include Volari in the Balmoral area, Hundred Trees in West Coast, Livia in Pasir Ris and The Arte at Thomson.

The property and hotels group posted a net profit of $193.6 million for the third quarter ended Sept 30, 2009, an increase of 28.4 per cent from $150.8 million a year ago. The improvement was due chiefly to its property development business. There was no one-off divestment gain, unlike for Q3 2008 when the sale of Commerce Point was booked.

For the first nine months, CDL's net earnings slipped 13.3 per cent to $416.75 million.

CDL said that it has agreed this month to sell all its 60 strata subdivided units in the 999-year-leasehold North Bridge Commercial Complex for $46 million. The sale is slated to be completed in March 2010 and profits will be booked in Q1 2010.

On the launch front this quarter, CDL is planning to offer a new 177-unit condo on Thomson Road next to The Arte. The project will comprise one to four-bedroom units, and they will be relatively small at affordable prices, the group said.

CDL generated $852.4 million cash flow from operating activities in the first nine months, a 175 per cent jump from $309.8 million previously. Gearing ratio improved to 42 per cent at end-September, from 48 per cent at end-December last year. CDL pointed out that this was not due to any fund-raising exercise such as rights issues or equity funding. Interest cover also improved to 13 times, compared to 11.7 times previously.

Group revenue increased 36.7 per cent to $940.9 million for Q3, and 5.5 per cent to $2.35 billion for the first nine months.

At Sentosa Cove, the group expects to complete construction of a yet-to-be-launched 228-unit condo on the Quayside Isle Collection plot towards the end of next year. The hotel and commercial components of the site could be completed in second-half 2012.

CDL, which is also a major office landlord, said that the group achieved occupancy of 90.3 per cent for its office portfolio as at end-Q3.

It said that the office market is seeing an increase in leasing activity. 'Occupiers are, in the meantime, still looking for lower-cost and better-value options, but there are selective companies seeking to expand.'

Looking ahead, CDL said that home buying interest in the next few months is expected to remain relatively stable, though not at the same pace as that experienced in Q2 and Q3 this year. This is on the back of the Monetary Authority of Singapore's recent statement that it may introduce further measures to cool the property market should there be risk of renewed escalation of speculative momentum.

'Compared to a year ago, positive property market sentiments are showing signs of recovery,' CDL said. 'For the group's property development segment, it has managed to lock in its profits from presales activities. It also has a wide spectrum of land bank catering to the different needs of the market segment and will be able to extract the appropriate land parcels, at the right time, to seize the opportunities as the market improves.'

The counter ended 12 cents lower at $10.08 yesterday.

BT : Property division helps boost Q2 profit 13% for Boustead‏

Business Times - 13 Nov 2009


Property division helps boost Q2 profit 13% for Boustead

By VEN SREENIVASAN

CONTINUED strong performance by its real estate division allowed Boustead Singapore to lift second- quarter earnings by a respectable 13 per cent in the face of challenging business conditions and unfavourable forex movement.

The engineering and infrastructure specialist posted a profit of $10.8 million for the quarter ended Sept 30, compared to $9.5 million a year ago. This was achieved despite a 12.7 per cent fall in revenue to $114.3 million.

The results translated into first-half net earnings of $20.2 million, which are 33.4 per cent up from last year's $15.2 million. Revenue came to $233.2 million, up 10.8 per cent from a year ago.

The group had net cash of $163.4 million and an order book in excess of $450 million as at end-September.

It declared an interim dividend of 1.5 cents.

The star performer during the quarter remained the real estate solutions division, which achieved revenue of $61.8 million, 7.7 per cent up year-on-year. This division's strong performance was underpinned by the steady progress of the industrial real estate solutions business, as well as improving revenue from the new township business in Libya, where Boustead is constructing a 1,164-villa township. To date, about one-third of the villas have been completed. The unit expects to continue clinching numerous projects in Singapore and around the world.

Commenting on the results, CEO and chairman Wong Fong Fui said that the first-half financial results were not unexpected given the generally challenging operating environment.

'Still, it was pleasing to see net profit growth of 33.4 per cent for the first half. Nonetheless, it is highly unlikely that we will be able to exceed our full-year record performance in FY2009, given that it is improbable that we will be able to unlock the value of any industrial leasehold facilities in FY2010.'

BT : Ho Bee posts record 9-month profit‏

Business Times - 13 Nov 2009


Ho Bee posts record 9-month profit

By KALPANA RASHIWALA

HO BEE Investment posted a strong increase in third-quarter net earnings, lifting its top and bottom lines for the first nine months past the record showing for full year 2007.

Net profit for the quarter ended Sept 30 rose to $99.3 million from $18.7 million for Q3 last year. Revenue swelled from $52.5 million to $209.2 million, largely as a result of a big chunk of income booked for the Orange Grove Residences project, which was completed in July.

Ho Bee's first nine months net profit jumped from $81.8 million to $293.9 million. Revenue quadrupled from $263.5 million to $1.06 billion. The numbers surpass the full-year 2007 net earnings of about $272 million and revenue of $596 million.

The strong report-card for the first nine months was achieved despite the fact that Ho Bee booked some $110 million of writedowns in Q2 this year for fair-value changes of investment and development properties.

'The group's revenue and earnings for the next quarter will remain positive,' said Ho Bee chairman and CEO Chua Thian Poh.

Besides Orange Grove Residences, other projects that contributed to the group's performance in the Jan to Sept period include Vertis in the Amber Road area, Quinterra at Holland Road, and The Coast condo and Paradise Island villas at Sentosa Cove. Ho Bee sold the last of 29 villas at Paradise Island in August for $22 million. All five projects received Temporary Occupation Permit in the first nine months of this year. That's when developers book a chunk of earnings from units sold in residential property developments.

Collections from buyers from these projects boosted Ho Bee's coffers. It enjoyed a whopping $896 million net cashflow from operating activities in the first nine months of 2009. This enabled it to repay nearly $700 million of borrowings this year, trimming group borrowings from about $1.15 billion at end-2008 to $457 million at end-Sept 2009. Cash and cash equivalents stood at $161.6 million at end-Sept 2009, up from $45.1 million at end-2008. Net gearing fell to a low of 0.26 times at end-Sept 2009 from 1.26 times at end-2008.

Ho Bee's net asset value per share appreciated from $1.20 at end-2008 to $1.56 at end-Sept 2009. On the stockmarket yesterday, the counter ended three cents higher at $1.40.

Ho Bee has released two projects in the current quarter - Trilight at Newton Road and Parvis at Holland Hill. The latter is a joint project with MCL Land. So far, 61 Trilight units have been sold since its launch in October and 55 units sold at Parvis, which was released this month.

Next year, Ho Bee is expected to launch a 151-unit condo project at Sentosa Cove named Seascape. The group has another project - a 304-unit condo - in the upscale waterfront housing area which it's developing on the Pinnacle Collection site. This could possibly be released late next year. Ho Bee is developing both projects jointly with Malaysia's IOI group.

ST : Five lawyers sued over sale of house‏

Nov 12, 2009

Five lawyers sued over sale of house

A PRIVATE investigator is suing five lawyers for professional negligence over the sale of his house in 2002.

Mr Simon Suppiah Sunmugam, 62, alleged that they had mistakenly paid property agency ERA $28,000 as a commission.

He said in his affidavit that he found the buyer of the property. The agency, therefore, did not deserve any payment.

The lawyers he is suing are Ms Amarjit Kour, Mr Gregory Tang Wee Thiang, Ms Belinda Ang Choo Poh and Mr Peter Cuthbert Low of the now-defunct firm Peter Low Tang & Belinda Ang. The firm represented his ex-wife Nee Shyam Huey in their May 1996 divorce.

The fifth lawyer he is suing is Mr Andrew John Hanam, who acted for him in the divorce.

The defence of the four lawyers is that they were hired by Madam Nee and not by Mr Suppiah, and thus owed him no professional obligation.

Mr Hanam is denying responsibility on the grounds that the sale of the Suppiahs' matrimonial home after the divorce was arranged by the other lawyers, so Mr Suppiah should refer to them to recover his losses.

Court documents showed that when Mr Suppiah defaulted in the divorce settlement, Madam Nee obtained a court order to sell the matrimonial home in Punggol.

She found a buyer for $1.6 million but Mr Suppiah objected because the price was too low. He then found a neighbour who was willing to pay $1.75 million.

He was expecting his share of the sales proceeds to reach $240,000, but received only $212,000 in July 2002.

When he discovered that a commission of $28,000 had been paid to the housing agent, he instructed Mr Hanam to write to the other lawyers to withhold payment. But it was too late.

At the opening of the civil suit yesterday, Mr Suppiah took the stand to tell his lawyer Alain A. Johns that despite the sale-and-purchase agreement, which did not authorise payment of the housing agent's commission, the five lawyers failed to protect his interest.

The hearing will continue next year.

ST : Kwek launches 'cool' Studio M hotel brand‏

Nov 12, 2009

Kwek launches 'cool' Studio M hotel brand

He aims for 50 worldwide in five years, with first at Robertson Quay area

By Joyce Teo

PROPERTY tycoon Kwek Leng Beng launched an 'utterly cool' hotel brand boasting a Singapore label yesterday. He aims to have at least 50 outlets across the world in five years.

The Studio M in Singapore brand is being unleashed through the Millennium & Copthorne Hotels (M&C) chain with the first to open at 3, Nanson Road in the Robertson Quay area around April next year.

Singapore could eventually have three to five Studio Ms, which Mr Kwek describes as a 'cross-breed between a boutique hotel and the normal type of hotels'.

The brand will cater to mostly savvy business and leisure travellers but not tour groups, said Mr Kwek, who is executive chairman of Hong Leong Group, the parent of M&C.

Studio M outlets have been earmarked for the Middle East, India, China, Vietnam and possibly Britain - through management contracts and ownership.

The debut hotel at Nanson Road will cost $120 million and will be built on a site Hong Leong bought in late 2006. It paid $45.8 million, or $518 per sq ft of potential gross floor area, in the tender.

The hotel will have 365 rooms with interiors and open-air tropical decks designed by Italian architect Piero Lissoni.

'It is chic, stylish, and you don't have to pay a bomb for it,' said Mr Kwek. 'It is like a five-star hotel, but you pay four-star rates.' Rates have not been finalised, but a room will likely cost $230 to $250 a night, he said.

Mr Kwek described the Studio M brand as 'utterly cool' and a '21st century new generation type of hotel' that will boast the best technology and pack efficiency into mostly standard rooms of 270 sq ft.

He hatched the idea of creating a new hotel brand about four years ago, and said the brand will fill a gap in the market here. There is increasing demand from business travellers who want a distinctive and unique experience from their hotel in addition to functional services such as wireless connectivity, he said.

Room rates here have fallen this year, and while the hotel market is not as good as in pre-crisis days, Mr Kwek said it is set to improve.

'It is my belief that the IRs (integrated resorts) will bring different types of customers here,' he said, adding that a second Studio M could be built within the next 12 months.

A likely venue is the sleepy Orchard Hotel Shopping Arcade. Mr Kwek said they are studying the possibility of converting it into a Studio M.

He also believes the central business district and the Bukit Timah area could support Studio M outlets. And as if Studio M is not enough, Mr Kwek wants to create another hotel chain as 'the world is running out of brands'.

Creating another brand will allow M&C to leverage on its vast experience in running hotels across the world.

Record $653,000 for Four-room HDB flat

Nov 13, 2009

A four-bedroom HDB flat in Queenstown was sold for $653,000. The sale sets a new record for price per square foot (psf), amid the continuing demand for resale units.

The buyers, an Indonesian male residing permanently in the country and a Singaporean woman, could have purchased a condominium unit in the suburbs for the same price.

But the couple was won over by the location, which is just five minutes walk from Queenstown MRT station. The unit is also on the 40th floor, with unblocked views of the surrounding greenery from all windows.

The four-year-old 969 sq ft flat located at Forfar Heights in Strathmore Avenue, was sold above valuation for $68,000 - a level determined by an independent appraiser.

The price works out to $674 psf, which is 10 percent higher than the previous record of $609 psf achieved in January last year.

High luxury-home prices are good

(Abstract by Business Times 12th Nov,2009 by Leslie Yee)

Policymakers can focus on alleviating life's anxieties such as providing low-cost quality education, healthcare coverage


I WORK in the real estate sector in Hong Kong but do not cover the residential property market. Nevertheless, like many residents of the Special Administrative Region, I have been fascinated by recent market developments. Over the past few months, prices have been rising, China buyers have been increasingly active, developers have been launching units and analysts have been talking about the lack of supply. Debate raged over the sustainability of price rises with the argument centring on lingering economic weakness versus abundant liquidity coupled with early signs of economic improvement.

News then broke in late October of Henderson Land's sale of a duplex at 39 Conduit Road for HK$439 million (S$78.54 million) or a world record HK$71,280 per square foot. What has since ensued is heated discussion over whether dreams of home ownership for the middle class in Hong Kong have been shattered in part due to rich China buyers driving up prices. Calls are being made for the government to tame the raging animal spirits in the Hong Kong residential market.

The themes playing out in the Hong Kong market are to some extent applicable to Singapore, although the Singapore private residential market rally this time round has been mass-market-led while that in Hong Kong is driven by the high end. Still, with Singapore's imminent opening of the integrated resorts, there could be a new spring in step for high-end properties.

In Hong Kong, questions being discussed include: Are foreigners pricing out locals? Do sky high prices for luxury units matter? What can and should government do to control property prices? What help if any should government render middle-class locals in owning their homes? Are the controversies in the property market a reflection of economic growth in recent years benefiting high-income earners disproportionately while the rest lag behind?

Invariably, there will be some degree of envy when wealthy foreigners come to any city and lord it over the locals. Such a scenario emerges in many a successful city, with rich Russians and Arabs in London, rich China nationals in Hong Kong and rich Indonesians in Singapore. However, should one follow the head rather than the heart, it is not just the Hong Kong property tycoons who ought to celebrate the sale of a luxury unit for HK$71,280 psf but everyone.

Wealthy people have a choice of where to invest their money. Hong Kong people should be proud that there are a fair number of rich people confident enough in Hong Kong's prospects to pay princely sums for property in the territory. Indeed, having millions poured into residential property helps generate real-estate-related jobs plus spending by the dwellers of luxury properties. Real estate investment may not generate the same amount of economic spin-offs as investment into manufacturing but they still bring economic benefits.

Singapore and Hong Kong share many similarities, key of which is that both cities, in my view, have a bright future catering to a rapidly growing Asia as hubs of finance, trade, transport, tourism, and various other services. Economic success of both cities does depend on keeping an open door to foreigners and this includes being broadly welcoming to participation by foreigners in the property market. Hong Kong has an important strategic fight on its hands of being competitively positioned as Shanghai and Beijing make strides up the league of global cities. The people of Hong Kong should be more concerned with the city's ability to thrive in an ever-changing global landscape than the state of the property market. Of course, should Hong Kong continue to grow as a key business hub, expect more reports of developers selling luxury units for mind-boggling sums.

Shelter is a basic need of man and owning a home is a key purchase decision for many people. Defining the type of housing that the middle class should be able to afford is, however, tricky. I believe that all policymakers can largely do is to ensure that there is adequate land supply such that there is a range of property types at different price points available. Just as with any consumer product, we should rely on developers to offer choice to meet a variety of needs.

It is not surprising that developments in the residential property market generate strong emotions. Very high prices at luxury projects are not mere aberrations and high prices at the high end can lead the rest of the market up. Nonetheless, the high end typically forms a small part of the wider market and purchasers at the high end tend to be financially strong, Thus, it would be wrong to see high luxury-unit prices as indicative of a property bubble, which is what policymakers rightly fret about. Instead, what policymakers could do is to be more effective in winning hearts and minds - that high prices at the high end are generally a good thing.

More critically, what policymakers in successful Asian cities can focus on is to put any discussion of residential real estate in a wider context. While anxieties of the middle class with regards to home ownership may be difficult to assuage, the state can focus on doing more in other areas to alleviate life's anxieties such as providing low-cost quality education, healthcare coverage and help with retirement savings. Let the pursuit of making a city a great place to work, live and play go together with ensuring that a range of needs of local residents are well taken care of. While not everyone can live in a prime neighbourhood, everyone can perhaps get reasonably good health care and education.

The writer is a Hong Kong-based real estate executive with extensive experience in the Singapore property market

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

Group8asia-Aedas design for Punggol homes

(Abstract from Business Times 12th Nov, 2009 by Uma Shankari)

THE design for the first public housing project along the upcoming Punggol waterway has been chosen.

International architectural firm group8asia has emerged as winner of the Housing & Development Board's Punggol Waterfront housing design competition. Group8asia teamed up with local firm Aedas to come up with the winning design.

The development, which will be launched in mid-2010, will have about 1,200 mostly four-bedroom apartments and will offer residents an eco-friendly housing experience, HDB said.

National Development Minister Mah Bow Tan announced the winner at an HDB awards ceremony yesterday.

The design will set the benchmark for other developments along the 4.2km waterway. Mr Mah said: 'I am glad to note that the private sector has responded enthusiastically to the challenge of coming up with truly innovative design proposals for this highly anticipated housing project.'

More than 100 firms took part in the contest, half of them foreign firms from as far as Spain, the Netherlands, Japan and Hong Kong.

The government's plans call for about 21,000 homes to be built along the Punggol waterway - comprising 60 per cent public housing and 40 per cent private housing. The waterway is slated to be completed by end-2010.

The winning design will take shape on the first residential plot to be developed along the waterway.

HDB said that the design by group8asia and Aedas stood out from the rest for its sky terrace concepts, with spaces for roof gardens. Other winning attributes include the resort-like design of the development, the 'functional and workable layout' of the site, and the refreshing housing forms that could be replicated along the waterway.

Chong Fook Loong, HDB's deputy director for physical planning, said that homes in the development will be kept affordable. In the same vein, Mr Mah said during the awards ceremony that HDB must be mindful to be cost-effective when designing and building its flats.

The ceremony recognised seven winners with a total of 12 awards in the categories of construction safety, quality and design. Two companies, China Construction and Surbana International, won multiple awards. The other five winners were Thong Huat Brothers, Kian Hiap Construction, Kienta Engineering Construction, Sim Lian Construction and United Premas.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.



Refreshing: The winning design stood out from the rest for its sky terrace concepts, HDB says

Don't give up confirmed list card again

(Abstract from Business Times 12th Nov,2009 by Kalpana Rashiwala)

Maintaining land supply will help alleviate volatilities in property prices and rents when cycles change suddenly

LAST week, the Ministry of National Development (MND) revealed a slate of eight residential sites that it would sell on the confirmed list starting January 2010. This came after a break of about a year on the sale of such sites.

Should confirmed list land sales have been suspended for such a long period? When markets suddenly pick up and land prices shoot up - as they have this year - it translates to less affordable homes in the mass-market segment.

For the Government Land Sales Programme to be effective, both the confirmed and reserve lists need to operate side by side. By restricting state land sales to the reserve list system - where sites are triggered for launch only upon successful application by developers - the state may effectively be giving all the cards to developers, who have their own self-interest at heart, first and foremost.

For instance, it would not be in a major office landlord's interest to make an application seeking the release of an office site from the reserve list if it is trying to fill a major office development and hopes that office rents will increase. However, if there is suddenly a pick-up in office demand - for example, if major financial institutions and funds resume their strategy of expanding in Asia and setting up hubs in Singapore - office rents could suddenly spike. Having sales of sites on the confirmed list would help to mitigate this.

Mass-market condo sites

Another drawback of selling land only through the reserve list has emerged of late, with prices of mass-market condo sites soaring at state tenders.

In October last year, MND suspended confirmed list land sales. That made sense at the time, during the dark days of the global financial crash. However, it continued the suspension for the first-half 2009 Government Land Sales programme and later, for the H2 2009 programme, even though developers' home sales had shown clear signs of revival by the time the H2 2009 slate was announced in early June.

After several months of strong home sales, especially in the mass-market segment, developers found that they had started to run out of entry-level private residential land. However, it was only in July that they began triggering residential sites for release through the reserve list. To date, six sites have been released, of which tenders for five have closed and been awarded - amid rising land prices.

Many of the sites are well located - near MRT stations, or near reservoirs. These are naturally the type of sites that developers would want released in the reserve list during a mass-market housing boom. However, such prime sites, because they are worth more, also lead to rising land values when there is a shortage of such plots in developers' landbanks. A rapid hike in land prices is not compatible with the national goal of keeping mass-market private home prices affordable.

Had the confirmed list not been suspended for the current half, the government could have used it to introduce some less-choice sites further away from MRT stations and not so near the city, just as it has now done for the H1 2010 confirmed list.

One can't blame developers for not wanting land released too early in the cycle from the reserve list. Frankly, it's not in their interest. Their motivation is to increase the value of their landbanks and existing properties; and having less land supply is generally better than having more supply.

There are also other factors at play. Developers don't have the best information - such as the size of new investments flowing into Singapore in the near future, how many permanent residents and new citizens Singapore will take in each year, and how much monies high net worth foreigners are parking in Singapore. The government has a much better idea.

Always maintaining at least a minimum supply in the confirmed list - in both good times and bad - will help alleviate the volatilities in land values, property prices and rents that come when cycles change suddenly, as they have in the mass-market private housing sector this year.

Booms and busts

While the government has, in the past, suspended the confirmed list midstream of its half-yearly programme when the market turns south, it has never restarted the confirmed list midstream when things suddenly picked up. Instead, it has waited for the prevailing half-year period to end before restarting the confirmed list. The argument for this would be that the authorities want to play by the rules and give more notice to market participants.

However, the substantial time-lag in resuming the confirmed list exaggerates the booms and busts in the property market.

That is why both lists need to operate side by side.

The government does not sell confirmed list sites if bids come in too low. Its usual policy is to award sites only if the top bids are at least 85 per cent of the Chief Valuer's assessed market value. This reserve-price formula - if rigorously applied - acts as a safety mechanism that would create a price floor for state land sites so that land prices don't crash and further erode market confidence in a downturn.

As the Singapore property market matures, it will be able to absorb news of confirmed list sites attracting no bids or low bids - and the sites subsequently not being sold by government. Over time, they will come to be seen as part of natural market cyclical fluctuations. The government should hold some of the cards by maintaining a confirmed list throughout instead of leaving everything in the hands of developers.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

Hersing Q3 profit soars on ERA's strong sales

(Abstract from Business Times 12th Nov,2009 by By Uma Shankari)

PROPERTY firm ERA Real Estate saw its Q3 profit jump more than five-fold year-on-year as it sold more homes.

Hersing Corporation, its listed parent company, said yesterday in its Q3 financial statement that ERA's after-tax profit for the three months ended Sept 30 climbed to $3.7 million, from $651,000 in 2008. Revenue rose 58 per cent to $57.1 million from $36 million.

'Not only have (home) prices increased, but the volume of transactions has also increased a lot,' said Hersing president Jack Chua.

The strong showing of its property division pushed Hersing's Q3 net profit up 315 per cent to $4.4 million, from $1.1 million in Q3 2008. Revenue rose 49 per cent to $67.2 million, from $45 million in 2008. Revenue was also boosted as Hersing's two other business divisions, StorHub Self Storage and its Western Union money transfer business, also posted better year-on-year results.

ERA marketed a slew of private home launches in the first nine months of the year, including Caspian, Double Bay Residences, The Gale and The Interlace. The company's data shows that of the 12,828 new private homes sold in the first three quarters of 2009, ERA's share came to 2,494, or about 19 per cent.

Mr Chua said that ERA has been working to increase its market share for sales of new private homes as the margins are better. 'New (private) homes contribute a bugger margin for the company than resale flats,' he said.

The firm is now best known for its HDB resale business. In the first nine months of 2009, ERA's market share of the HDB resale market came to 41 per cent.

Mr Chua also said that he expects ERA to be appointed as the marketing agent for more private property launches in 2010.

'The government is releasing more land for buildings more homes, so we will have more market opportunities for ERA,' he said, referring to the decision to restart the confirmed list of the Government Land Sales programme in the first half of next year to meet the strong demand for private homes.

ERA has already been appointed to market several private residential developments that could be launched in Q1 2010.

For the nine months ended Sept 30, ERA saw after tax profit climb 181 per cent to $5.8 million, while revenue rose 19 per cent to $116.1 million.

For Hersing, net profit for the first three quarters rose 116 per cent to $8 million, while revenue climbed 18 per cent to $144.8 million.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

High-spec space losing favour due to low office rents

(Abstract from Business Times - 12 Nov 2009, by Emilyn Yap)

Some firms have gone back to leasing commercial space.

HIGH-spec industrial space has lost favour with tenants in the past few months. As office rents plunged, some companies have gone back to leasing commercial space, says Colliers International.

The move has, in turn, driven down rents for high-spec space. According to the property consultancy, the average monthly gross rent of high-spec space fell 14.1 per cent to $2.93 per square foot at end-September from $3.41 psf at end-March.

The lower rents reflect stiff competition for tenants, Colliers said, adding that some companies had taken advantage of the sharp drop in office rents to relocate to office premises.

This marks a reversal of the trend that started in 2007. As office rents soared on the back of a booming economy, more firms moved away from the central business district to cheaper high-spec industrial space.

But office rents have plummeted amid the economic slowdown. CB Richard Ellis said in September that monthly prime office rents averaged $7.50 psf in the third quarter, dropping 12.8 per cent from the previous quarter. They have fallen 53.4 per cent from their peak in Q3 last year.

Colliers said that on top of shrinking demand, a large supply of high-spec space is expected to appear next year, which has also contributed to falling rents.

In contrast, rents for some factories and warehouses have been relatively stable. Colliers said that from end-March to end-September, the average monthly gross rent of single-user factories in central Singapore stayed firm at $1.30 psf, while that of warehouses in eastern Singapore held up at $1.20 psf.

And on a positive note, Colliers said that there has been a noticeable pick-up in sales of industrial space. These involved mainly private investors, owner-occupiers and domestic companies.

While industrial space markets across the Asia-Pacific appear to be bottoming out, Colliers remains cautious in its outlook. It believes that these markets could stay subdued in the next 12 months, given that the global economy is still recovering and excess manufacturing capacity still exists.

Colliers research and advisory director Tay Huey Ying expects rents and capital values of factories and warehouses in Singapore to rise by up to 5 per cent in the next 12 months 'on the back of the expected improvement in the economy and the manufacturing sector, as well as more optimistic business sentiment'.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

TODAY online : Reits required to hold mandatory AGMs

05:55 AM Nov 12, 2009SINGAPORE - Real estate investment trusts (Reits) will be required to hold annual general meetings, or AGMs, once every calendar year with effect from next year.

This is a new requirement introduced by the Monetary Authority of Singapore (MAS) under the revised Property Funds Appendix.

MAS said mandatory AGMs will enhance corporate governance for Reit by providing an important channel for communication between Reir managers and unit holders.

This will allow Reit managers to be more accountable to unit holders, MAS said.

In addition, MAS said AGMs will also provide a regular opportunity for Reit managers to seek general mandates from unitholders for the issuance of new units.

The central bank said the revision took into account feedback from its public consultation earlier this year as well as discussions with Reit players. Irene Chan

ST : S'pore household net wealth hits $1 trillion

Nov 11, 2009

S'pore household net wealth hits $1 trillion

HOUSEHOLDS have generally weathered the financial crisis well with net wealth rising to an all-time high of

$1 trillion as of Sept 30, after slumping to $895 billion in the first quarter this year.

The record numbers - released in the Monetary Authority of Singapore's (MAS) annual Financial Stability Review on Monday - go a long way towards explaining why the recession that has just ended seemed less painful than previous downturns.

The recovery in the stock and property markets since the first quarter is one reason, but Singaporeans are also richer as they saved, invested and paid down their debt.

The global economic recovery has meant a strong rebound in net wealth - assets minus liabilities.

Take property assets, for instance. The MAS data showed that real estate holdings have turned around - they were up by an estimated 9 per cent to $537 billion in the three months to Sept 30, from the low of $491 billion in the second quarter.

The central bank noted that household assets remain more than six times the value of household liabilities, while aggregate household net wealth is about four times the value of gross domestic product, up from about 3.6 times in the first quarter.

Singaporeans refused to splurge on credit, keeping debt at roughly the same level during the economic downturn, the data showed.

Total liabilities increased by just 4 per cent year-on-year in the third quarter - much lower than the long- term average growth rate of about 13 per cent, the MAS said.

Most of the increase came from mortgages, which account for the bulk of household borrowing. This was mainly due to the increased activity in the property market.

'In short, households have generally weathered the crisis relatively well on the back of their strong balance sheets,' said the MAS.